Update – PwC US Layoffs

Little birdies (and a lot of gossip on Vault) tell me that based on a reorganization done with some advice from McKinsey, PwC is in the midst of three waves of layoffs. The first came before the end of their fiscal year, June 30. As usual, within PwC, there were a lot of announcements of coming announcements and announcements of local office “Town Meetings” to discuss the state of the business. They do a lot of talking about what’s going to happen instead of just doing it, it seems…

Cuts are focused on their Advisory (Consulting) practices (including Internal Audit) and their internal financial and administrative support groups, in particular the marketing and business development organizations. When I left late last year, business was slow in their emerging Advisory (Consulting) practice so it’s likely reductions are overdue there given prior aggressive “Catalyst” hiring. In an ironic twist, due to lack of a solid sales pipeline, they’re reducing the number of salesmen! But many of the staff, especially the younger ones they’re trying so hard to attract and retain supposedly, are confused and fed-up. I’ve heard from some directly via email.

I’ve heard that they have also started making strategic cuts of client service professionals in some markets and asked Executive Assistants over the age of 55 (who are predominantly women with long tenures) to consider early retirement packages. They have already closed whole offices in places like Memphis and Syracuse.

Interestingly, I am also seeing a lot of Google searches with “Deloitte layoffs,”, “KPMG Layoffs” and other firms like Accenture showing up. I guess no one uses the word “layoff” in their Press Releases anymore, at least in the Big 4 and so these searches come to me, the only one who is talking about them.

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As a high performer at PwC (now ex-PwC), I can definitely say the re-org has been an utter disaster. The annual review was much harsher than usual, which I would guess was to encourage low performers to leave. However, the low performers are those who are fine with being 3s or 4s, and doing little work for the same pay as high performers. At the end of the day, those who worked very hard to out-do and outperform were rated lower than usual, and screwed. So, the talent is leaving in a mass exodus, and I honestly feel bad for the partners who have devoted so much time to the firm. They’re stuck with lack-of-talent, so it’s only going to get more ugly. Thanks McKinsey!

I have to agree with everything that has been said about the re-organization being a disaster. In almost every area of the Admin staff, the high performers are the ones who are being shown the door. Those who have been here a long time and know the culture and history of the firm are out.

Originally, this non cost-cutting cost-cutting venture was supposed to realign markets so that the service to the internal clients would be more efficient. The idea was to raise the level of administrative service. Unfortunately, anyone with half a brain (obviously not those involved with determining the layoff targets) can see that it is going to have the opposite effect. Service is going to take a nose-dive. They have even decided to create several positions known as MALs (Market Administrative Leaders) to be nothing more than scapegoats who have to field all of the complaints that are inevitably on the way.

I am former PwC employee. I got “separated” on 02/08/08 from the Systems and Process Assurance Group in the Atlanta Office. I agree that this wave of layoffs (11 people in one week )was poorly planned and the Atlanta SPA group management is yet to be held responsible for hiring 11 new employees in July 2007 through September 2007 and then laying off 11 employees six months later because they failed to have foresight on the effects of AS

SPA Staff in the Atlanta Office don’t know if there is going to wave 2,3 or 4. Morale is low and their rationale for chosing those individuals to layoff was ill-conceived, experienced hires, seniors and experienced seniors vs new hires.

I can confirm that all comments are accurate (I was “separated” from the “firm” yesterday). I am honestly relieved about it bacause the situation will get worse. The lay-off has been managed very poorly and un-professionally (interesting for a firm that is supposed to be full of “experts” in change and transition planning) and the leadership team demonstrated – again – to be a massive failure.

Other big 4 are doing relatively well (see recent article on WSJ) so good luck for who is still on-board. Times to come will be very hard.

What makkes little sense is PwC laying off people who are now 100% utilized on projects. After a bad summer I have been working non-stop and am managing a large project. My reviews are great. My YTD utilization is below target…so out the door. PwC has always been poor at talent management and this is just another example of smart people doing really stupid things.

It seems clear now that PwC no longer has the subject matter EXPERTISE to support audits after this round of layoffs. Not sure what they were thinking, but I know my clients who know about the layoffs are scratching their heads too.

The is not a PwC issue. All the Big 4 will be laying off after the busy season. There have been many years of non-layoffs due to Sarbanes and a strong economy, and now there is AS5 and a slowing economy. Additionally, these firms have always been a great “training ground” for many, but a long term “home” to few.

Depending on the severity of the slow-down and the reluctance of the firm, you will either see several waves of cuts or some big blood-letting. You are never safe, regardless of what anyone says, economics dictate. Next years college recruits are an endless supply and the firms know how to use recruiters, office-transfers and H1-b’s (especially after cross the board lay-offs).

If you are still in the firms; work hard, keep your head down, and hope for a little good luck.

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Francine McKenna (@retheauditors) is the Transparency Reporter at MarketWatch.com, a Dow Jones publication, where her work is also featured frequently in the Wall Street Journal. McKenna had more than twenty-five years of experience in consulting and professional services including tenure at two Big 4 firms, both in the US and abroad before becoming a journalist. Look for her prior columns, "Accounting Watchdog" at Forbes.com and "Accountable" at American Banker. For more information, click "About" at the bottom of this page. For more information contact Francine McKenna, fmckenna@mckennapartners.com